Three years ago, while visiting friends in the wine-producing Languedoc-Roussillon region of southern France, Timothy McDonald decided he wanted what they had: a chance to experience small-town life in what is sometimes described as an unspoiled and more affordable version of Provence. A year later McDonald and his wife, Kathleen Brooker, took a mortgage on their paid-up Seattle home and plunked down $200,000 in cash for a 15th-century former shop house in the remote agricultural village of Azille (pop. 1,100), 90 minutes from the Toulouse airport. The couple, both in their early 60s, plan to spend several months a year there after she retires someday from her job as executive director of Historic Seattle. (McDonald, a semiretired architectural preservationist, already spends a month at a time there.)

While some aging boomers might put a premium on convenience or a place that can accommodate future physical limitations, McDonald and Brooker bought in a town without even a train station and from a contractor whose idea of tasteful renovations included removing the handrail on the narrow staircase of the three-story stone structure. And why not? They're fit bikers, runners and history buffs who care more about the town's proximity to Cathar Romanesque sites and enjoying their French, British and Swiss neighbors. "We wanted to have a bigger life, rather than have a bigger home in the U.S., and ironically we found it in a small French town," says Brooker.

Of course, American billionaires and celebrities have always lived large in Europe. cofounder Paul Allen reportedly keeps a staff of 12 at his hilltop villa in St. Jean Cap-Ferrat, along the Côte d'Azur. George Clooney's 30-room palazzo on Italy's Lake Como has starred in many A-list parties.

But a weaker euro, low interest rates and crashing real estate prices in parts of the euro zone are prompting more ordinary American Europhiles to look at buying a piece of the Old World .

What they're currently finding, says Ronan McMahon, who reports on real estate trends for the International Living website, is that European prices peaked between 2006 and 2008 and are now all over the map. Stratospheric London and Paris prices never fell that much and have headed back up. But an exodus of youth from rural France and Italy has made homes like the one Brooker and McDonald bought somewhat more affordable.

Then there are Europe's real estate bust areas, which unlike, say, Nevada and Florida haven't started their comebacks. McMahon's advice for those areas: Wait until prices have fallen dramatically and be prepared to hold for a while. That makes him bullish on Spain and Ireland but bearish on Portugal's Algarve and the Greek islands of Crete, Mykonos and Santorini, where prices are down only 30% from their peak. By contrast, along the scenic Ring of Kerry, near McMahon's Adare, County Limerick, Ireland base, $100,000 can get you a country cottage, a newly built modern home or a building plot with views of the Atlantic. All would have fetched $500,000 at the peak. In Spain deal hunters have been scooping up apartments in failed developments from banks selling for one-third of the 2007?08 list price. A two-bedroom, two-bath apartment on the Costa del Sol with distant views (on a clear day) of the ocean less than a mile away can be had for $100,000.

Beyond the state of the real estate market, consider how a purchase fits into your overall finances and whether you're really game for the practical, legal and personal challenges of maintaining a home in another country and possibly retiring there. Visit the area you're considering multiple times, rent a place (rather than staying in a hotel), shop for food, do laundry and get the full residential experience, good and bad. Ask yourself what you're looking for: a base for travel or a charming destination? A primary or second home? Or maybe just a vacation place that you'll also rent out?

Two years ago Ray Stewart, a 63-year-old, Europe-based American telecom exec, bought a 3,300-square-foot apartment in central Brussels as part of his "lifestyle plan." After Stewart retires in a year or so, he and his wife, Barbara Reno, 66, a former not-for-profit executive, hope to serve on corporate and charity boards, dividing their time between a house in the U.S. and Europe, with Brussels as a base. The city of 1.1 million is 80 minutes by train from Paris, two hours from London and a lot less expensive to buy in than either. Sure, the rent a Brussels flat commands is less, too, but Stewart doesn't plan to rent it out. He acquired two units and merged them into a three-bedroom, three-and-a-half-bath apartment to accommodate visits from the couple's three adult sons from prior marriages.

Elizabeth McCaw, a former estate-planning lawyer, and her husband, Yahn Bernier, a software developer for Valve, both in their early 40s, had a less grand vision: vacationing in Paris with their 6-year-old daughter, Cameron, with a minimum of fuss. So they paid nearly $300,000 (about half in cash and the rest with a seller-financed mortgage) for a fractional share giving them five weeks a year in a three-bedroom apartment on the Left Bank. Annual expenses for maintenance, management and mortgage, partly offset by rental income, run around $6,700. That's about what they'd have to pay to rent the apartment in low season, and they can store Cameron's toys in the basement while visiting Bernier's relatives elsewhere in Europe. They're considering spending more time in Paris after retirement and look at the purchase as "a good trial run without having to make a huge commitment," McCaw says.

Kim Hawley, 56, and her husband, Thomas van Overbeek, 63, retired Silicon Valley CEOs, considered buying in Wengen, a sleepy village in the Bernese Oberland region of Switzerland, which they've visited 17 times, but concluded it didn't make financial or personal sense. Houses there are costly relative to rents. And with grandkids in the U.S., they weren't going to spend half their time in Wengen, anyway. Plus, says Hawley, owning homes in San Jose, Calif. and the Sierra Nevadas is "enough of a headache?--we're not house collectors."

Just because you buy a home in a foreign country doesn't mean you have the right to live in it. If you spend most of your time in the U.S., you may be able to rely on the Schengen Agreement signed by 25 EU countries--you don't need a visa or residency permit if you stay in the EU no longer than 90 consecutive days within a six-month period. But it's meant for temporary visits, not for long-term residents, and border officials might deny you entry if they see you've used it repeatedly, cautions Alan Seagrave, a lawyer with Foley & Lardner in Miami.

Some countries (e.g., Australia, Colombia, St. Kitts and Nevis) offer special retirement or investor visas allowing those who are ready to invest locally to stay, but EU countries generally don't. Still, they're friendlier to retirees who can support themselves without taking already scarce jobs. Retired U.S. schoolteachers Ron and Linda Audet got an extended-stay visa from the Italian consulate before moving to Florence two years ago. Once there they applied for a residency permit, which must be renewed every two years until they've been there for six years. To get it they had to provide financial statements showing they could support themselves without working--which they're not allowed to do.

LINE UP MEDICAL INSURANCE

The Audets' residency permit made them eligible to buy government-sponsored health insurance at an affordable rate--a big plus, since with very limited exceptions Medicare won't reimburse you for expenses overseas. For shorter trips retirees can buy travel gap medical insurance, with the premium based on age; a 68-year-old can buy $1 million of coverage from HTH Worldwide for $7.43 a day--for up to 70 days. But some travel policies exclude preexisting conditions or medications you take on a regular basis. International health insurance is designed for stays of longer than six months, includes preventive care and is renewable once you qualify. But there is no guarantee that you will get the initial policy. Whether you're buying it from a U.S. company or one overseas, you can be turned down for a preexisting condition. And it's not cheap. The charge for an expatriate plan for someone 65 to 69 years old with a $1,000 deductible is $819 per month.

MIND THE TAXES

Owning a European home could subject you to extra layers of taxes. "In France we have any possible tax you can think of," sighs Paris lawyer Jean- Marc Tirard. Even if you're not working abroad, if you rent out a property you own, you're likely to have income that is taxable there and a tax filing obligation. Yes, you can get a credit on your U.S. income tax bill for foreign income taxes paid. But in France there's also an annual wealth tax on a property if its net value is more than 1.3 million euros (about $1.65 million). Warning: If you're considered a French resident, the tax applies to all your assets worldwide, although there's a five-year grace period for new arrivals. Wealth taxes may be on the horizon elsewhere in Europe, too.

BEWARE ESTATE TRAPS

In the U.S. your will or living trust can leave real estate to whomever you choose. Not so in most of Europe. Unless your property is in England, children share inheritance rights with your spouse--sometimes called "forced heirship"--and the more kids you have, the less your spouse gets. If you have three children, your spouse is entitled to one-fourth of that ch?teau in the Loire, and the kids get the rest. Holding property as joint owners ( en tontine in French) is one workaround, though not something the locals typically do. Depending on the country, there may be others. In France you can set up a corporation to buy and hold the real estate; in Italy you would use a trust for this purpose.

You may even need a separate foreign will if you hold property in a country that hasn't signed a multinational treaty. Case in point: In Italy a will must be handwritten. (You were looking for Old World charm, right?)

Your heirs may also have to contend with estate or inheritance tax on European property, even if you weren't technically a resident of the country. Both Italy and France, for example, impose an inheritance tax with rates based upon the relationship of the heir to the person who died. France only recently adopted a tax exemption for property left to a spouse. (It was introduced by Nicolas Sarkozy after he married Carla Bruni.)

CONSIDER CURRENCY RISK

Particularly if you'll be renting your property out, you may want to borrow to buy--interest expense reduces the taxes you would have to pay on rental income, both in the foreign jurisdiction and at home. By borrowing as much as you can (80% is the top end of what banks typically allow, lawyers and financial advisors say), you benefit from inflation because both the value of your property and what you can charge for rent will increase, while your debt remains the same.

But that raises the tricky question of which currency to borrow in. If you're paying interest from rent, then borrowing in the country where your property is situated minimizes currency risk. If you're paying off borrowing with U.S.-sourced income, then a U.S. loan makes servicing that debt more predictable; borrowing in Europe and paying off with U.S.-sourced income is, in effect, a bet the dollar will stay strong or strengthen against the euro.

Still, you only live once. If you want to spend part of your time in a European home, and have the resources, now might just be the time to go for it.